Welcome to Compliance Hot Spots, and good evening from Washington. Big Law is weighing in on a notable appeals court decision that came just in time for the Justice Department as it prepares for a string of upcoming foreign bribery trials. Also: Huawei's chief financial officer, fighting her extradition from Canada to the U.S., is accusing law enforcement in both countries of misconduct. Plus, scroll down to see who was in Deutsche Bank's corner as it reached a $16 million settlement with the Securities and Exchange Commission.  Tips, feedback and general thoughts on your practices are always appreciated. I'm C. Ryan Barber—reach me at [email protected] and 202-828-0315, or follow me on Twitter @cryanbarber. Thanks for reading!

 

 

'No Doubt': Appeals Court Ruling Will Bolster Foreign Bribery Enforcement

Justice Department prosecutors have a packed anti-corruption docket this fall, with foreign bribery cases set to go to trial in Florida, Maryland and Brooklyn federal courts.

As the Justice Department prepares for those trials, all slated to start in October, a federal appeals court in New York has put some wind in prosecutors' sails.

In a blog post this week, a team at Dechert writes that a recent ruling from the U.S. Court of Appeals for the Second Circuit "will no doubt bolster prosecutors' confidence and encourage intensified enforcement" of the Foreign Corrupt Practices Act, a federal law prohibiting bribes meant to build or maintain business overseas.

The Second Circuit earlier this month reinforced the broad reach of the FCPA in a ruling that affirmed the conviction of Ng Lap Seng, a Chinese businessman who'd been convicted of paying two United Nations ambassadors more than $1 million to secure their commitment to base an annual conference at his Macau convention center. Ng, represented in the Second Circuit by Kirkland & Ellis partners Paul Clement and Erin Murphy, challenged his conviction, in part, by citing the U.S. Supreme Court's decision in McDonnell v. United States. In that case, involving former Virginia Gov. Bob McDonnell, the high court established that a violation of the general bribery law occurs only if a payment prompts an "official act," meaning some formal exercise of a government official's authority.

In Ng's case, the Second Circuit declined to extend that restriction to the FCPA. It was a victory for the Justice Department in a rare instance of a federal appeals court considering the breadth of the foreign bribery law.

"The Department of Justice has been pursuing broad interpretations of the FCPA for years. Most of its cases have been resolved through out-of-court settlements with corporate entities, which provide, at best, non-binding guidance to practitioners about the contours of the FCPA," wrote Dechert partners Michael Gilbert and Benjamin Rosenberg, who were joined by associates Katherine Wyman and Brendan Herrmann.

"The DOJ's success in United States v. Ng Lap Seng provides an appellate victory just as the DOJ's FCPA Unit commences a slate of six trials this fall—three of which will occur in district courts within the Second Circuit—at which the DOJ's interpretation of the FCPA and other bribery-related statutes will likely continue to be tested."

McDermott Will & Emery has more here on the Second Circuit's ruling.

 

 

Who Got the Work

>> Allen & Overy partner David Esseks advised Deutsche Bank as it agreed to pay more than $16 million to resolve charges it hired under-qualified relatives of Chinese and Russian government officials to win business abroad. As Quartz reports, the SEC's settlement detailed how a prospect for a Deutsche Bank job "was described as 'an average-level candidate based on the interviews but failed 2 tests which means she is not good at analysis.' She was hired anyway. Her father happened to be the chairman of a large Chinese state-owned corporation." The Washington Post has more here.

>> William Stellmach, a partner at Willkie Farr & Gallagher, represented the broker-dealer AOC Securities and its former chief executive officer, Ronaldo Gonzalez, in a settlement with the Securities and Exchange Commission resolving claims that they failed to supervise a broker who provided inflated price quotes to a significant customer. AOC and Gonzalez agreed to pay respective penalties of $250,000 and $40,000.

>> Nike has hired Capitol Counsel to monitor and lobby on issues pertaining to intellectual property protection, retail industry, trade, technology and data protection. The Capitol Counsel team includes Joshua Kardon, a former chief of staff to Sen. Ron Wyden, and Warren Tryon, a former deputy staff director of the House Financial Services Committee.

 

 

Compliance Reading Corner

>> Seventh Circuit Guts FTC's Powers—Setting up Supreme Court Showdown. "The court, breaking from several other appeals courts and its own precedent, found that the Federal Trade Commission lacks authority to seek restitution from companies that defraud consumers. The decision from the U.S. Court of Appeals for the Seventh Circuit vacated a $5 million judgment against the Credit Bureau Center, which the FTC had accused of offering "free" credit monitoring, then automatically enrolling consumers without notice in a paid monthly membership for credit-monitoring services." [Courthouse News] Reuters has more here, and read the Seventh Circuit's decision here.

>> Huawei Executive Argues Canada Abused Her Rights. "Huawei Technologies Co.'s chief financial officer argued in court documents made public Tuesday that Canadian efforts to extradite her to the U.S. should be stayed because of misconduct by Canadian and U.S. law enforcement." [Wall Street Journal]

>> Former Skadden Partner Cliff Sloan Reveals Unease Over Firm's Ukraine Work. "With Sloan on the stand, prosecutors reviewed emails revealing the trepidation felt by some within Skadden as the firm weighed the prospect of working for the Russia-aligned government of Ukraine. The emails also displayed how Craig fretted over registering as a foreign agent and sought to structure the firm's deal with Ukraine to steer clear of FARA." [National Law Journal]

 

 

Notable Moves & More

>> Walmart has hired Emma Waddell, formerly chief compliance officer at SunTrust Bank, as vice president of financial services compliance. Walmart also said Joe Rodriguez, formerly a top in-house compliance lawyer at Capital One, will serve as lead counsel for financial services.

>> Dileep Srihari, formerly senior policy counsel at the Telecommunications Industry Association, left the agency effective Aug. 16. Srihari, who was not reached for comment about his next steps, had held the TIA role since November 2017. Srihari was an associate at Wilmer Cutler Pickering Hale and Dorr from 2004 to 2009.

>> Edward Hanover, who was FIFA's first chief compliance officer for the past three years, will become a partner at DLA Piper in Palo Alto on Sept. 3. Hanover said he will focus on the sports, media and entertainment law practice, my colleague Sue Reisinger reports.

>> Hinshaw & Culbertson has hired Jennifer Gray as a partner in the consumer financial services practice in Los Angeles. Gray formerly was a partner at LeClairRyan.

>> Spencer Fane has brought on Peter Riggs as of counsel in the Kansas City office. Riggs had served as chief trial attorney in Kansas City since 2014 for the U.S. Commodity Futures Trading Commission since 2014.